Short run
Topic: Production Function, Returns and Costs · NCERT: Class 12, Ch 3 "Production and Costs"
Meaning
The short run is a period in which at least one input cannot be changed. That input is the fixed factor, usually capital such as plant or machinery. The firm changes output only by changing its variable inputs, usually labour. So in the short run there are both fixed costs and variable costs. The law of variable proportions applies here.
Example
A shirt factory in Tiruppur cannot add new sewing floors quickly. To meet a big export order, it hires more workers and runs extra shifts using the same machines.
Don't confuse with
- Long run: in the long run all inputs can be changed and there is no fixed cost.
- "Less than one year": this is a common trap. The short run is defined by whether inputs can be changed, not by calendar time.